A fixed asset register is used by a business to manage fixed assets it owns. A fixed asset is an item owned by a business and used to generate its income. An example of a fixed asset is a van used for deliveries or a computers.
The amount and value of fixed assets varies from business to business. Some businesses require more assets than another. A fixed asset register can help a business track what fixed assets it owns, changes in fixed assets, location of assets and asset values for insurance purposes.
What is a Fixed Asset Register?
Put simply it is a list of fixed assets owned by a business. Its a record of the details of each asset, its cost/value, location and depreciation method. Here are some examples of fixed assets that would typically need to be included:
- Office equipment;
- Cars, vans, lorries.
Why Keep a Fixed Asset Register?
A fixed asset register can be a useful piece of information to keep because it helps business owners track all of the fixed assets it owns. It assists them to:
- Ensure the correct value of fixed assets is registered on their balance sheet;
- Use a single document to review which assets a business owns, their value and can help draw out the potential for fixed asset revaluation which strengthens the balance sheet;
- Act as a checkpoint to ensure an appropriate level of insurance is in place;
- Provide accountants with a complete list of fixed assets for tax purposes so they can check all capital allowances are claimed;
- A separate check point to help business owners detect fraud, theft and misappropriation of company funds;
- Help stay organised to avoid headache later on. For example at year end or in the event of a tax inspection;
- Help business owners track what they own to avoid buying twice or raise cash by selling off old or unused assets.
Example Fixed Asset Register Template in Excel
A fixed asset register in excel can take many different formats and designed to suit the specific needs of the business. Here is an example fixed asset register template in Excel.
DOWNLOAD: Sample Fixed Asset Register
First Steps to Building a Fixed Asset Register
Here are some steps you may want to take if you are building your Fixed Asset Register for the first time:
- Perform a physical audit by walking around and identifying every asset you own and noting them on your register;
- Decide on the base way to classify and organise your assets and organise. For example you may want to group asset according to location or type;
- Contact your accountant for a breakdown of fixed assets disclosed on your balance sheet and reconcile your Fixed Asset Register. This is a check that your balance is correct, depreciation is accurate and all capital allowances you are entitled to have been claimed.
Maintain a Fixed Asset Register on Your Accounting System
Accounting systems such as Xero or Freeagent offer Fixed Asset Register functionality. Here are some of the pros and cons of using an accounting system:
Pros of Using an Accounting System
- The fixed asset register automatically updates when an asset is bought;
- Automatically calculates depreciation;
- Keeps all information in one place.
Cons of Using an Accounting System
- Functionality can be limited and information can’t be tailored to the business needs;
- A separate list is easily accessible by different people in the business, which may be useful.